The "magic number" for the amount Americans think they need for retirement has surged to an all-time high and is now 50% higher than at the start of the pandemic.
U.S. adults believe they will need $1.46 million to retire comfortably according to a new survey.
That is up 15% from $1.27 million reported last year, according to a report released by financial services company Northwestern Mutual.
The study among 4,588 U.S. adults aged 18 or older looked at attitudes, behaviors, and perspectives and how they impact customers' long-term financial security.
The authors say that the "magic number" has jumped 53% from the $951,000 target Americans reported in 2020.
By generation, both Gen Z and Millennials expect to need more than $1.6 million to retire comfortably. High-net-worth individuals - people with more than $1 million in investable assets - say they'll need nearly $4 million.
Meanwhile, the average amount that U.S. adults have saved for retirement dropped modestly from $89,300 in 2023 to $88,400 in 2024. That is down from a peak of $98,800 in 2021.
That means the average person who is short for retirement is more than $1.3 million.
"In 2023, the soaring cost of eggs in the grocery store symbolized inflation in America. In 2024, it's nest eggs," said Aditi Javeri Gokhale, chief strategy officer, president of retail investments, and head of institutional investments at Northwestern Mutual. "People's 'magic number' to retire comfortably has exploded to an all-time high, and the gap between their goals and progress has never been wider."
There is good news for younger generations. Gen Z started to save for retirement earlier than prior generations. The study said the average age that Americans say they started saving for retirement is 31 but for Gen Z it is 22.
That is 15 years earlier than when the Baby Boomers started. Millennials and Gen X'ers began saving for retirement at ages 27 and 31, respectively, according to Northwestern Mutual.
"These numbers tell a fascinating story about the profound shift in financial planning that has taken shape in America," said Gokhale. "Young people today recognize the value of retirement planning and building wealth early on in life."
In 2024, more than four million Americans will turn 65. That's an average of 11,000 Americans per day, and it will continue through 2027. It's the largest surge of Americans hitting the traditional retirement age in history.
The study found that just about half of Boomers (49%) believe they will be financially prepared when the time comes.
